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Swaziland's Minister of Finance, Majozi Sithole, has told the Senate that each year the country loses nearly double the annual social services budget to corruption, and non-governmental organizations are not being spared.

"Because of these practices service delivery has suffered," Sithole told the upper house, composed mostly of appointees of King Mswati III, sub-Saharan Africa's last absolute monarch, on 10 October 2011.

The donor-dependent country sandwiched between Mozambique and South Africa is on the brink of insolvency and its financial crisis means that social services from schooling to pensions have either been discontinued or severely disrupted.

Sithole estimated that about R80 million (US$10.6 million) a month was disappearing - amounting to about R960 million (US$128 million) annually - while the government's 2010/11 budget allocated R562 million (US$75 million) to social services, including R182 million (US$24.2 million) for education and R252 million (US$33.6 million) for health.

The government established the Anti-Corruption Unit in 1998 and the first graft conviction coincided with Sithole's speech to the Senate after a private company was found guilty for the overcharging of goods supplied under a government tender.

In a 2005 interview Sithole told IRIN: "Some highly placed individuals connive with government officials to inflate contracts or even make government pay for services that were never rendered. The playground for corruption is in goods and services, as well as construction projects."

South Africa has agreed to give Swaziland a US$350 million bailout after several international finance institutions, among them the International Monetary Fund (IMF), declined to throw the country a lifeline unless it restructured its finances, including trimming a public sector wage bill estimated at R872 million (US$116 million) annually, reputedly the largest per-capita public workers' bill in Africa.

Swaziland has yet to sign the Memorandum of Understanding to release the money.

About 70 percent of the 1.1 million population live on US$2 or less day and the country has the world's highest prevalence of HIV/AIDS, with one in four Swazis aged 15-49 infected with the disease.

An economist at a South African bank in the capital, Mbabane, who declined to be named, told IRIN that corruption was "a systemic problem coming from a government that answers to no one and is accountable to no one. The finance minister lists the causes of corruption, and these are all officials who collude with companies to steal from government through various means, or who take bribes and hire their girlfriends and relatives for jobs instead of qualified candidates."

Pro-democracy and socio-economic protests have gathered momentum in recent months, but there has been little indication that Mswati's government is taking steps to bring about reform.

Thandi Nkambule, director of the Swaziland Network for People with HIV and AIDS (SWANEPHA), an umbrella group for NGOs dealing with HIV/AIDS issues, told IRIN: "Corruption is a known reason why government is in a financial crisis. The shortage of ARVs [antiretrovirals] for HIV-positive Swazis is a result."

Systems of corruption

Sithole said some high ranking government officials were "forcing business people to finance what appears to be a just cause while on the other hand taking a lot [of the donated money] for their own private use."

It will make donors think twice about giving to Swaziland. Without donor funding we are done [for], and we provide services that government does not

He told the Senate: "We hear of cases where the finances of charitable organizations are diverted and used to pay scholarships for friends and lovers abroad We hear of cases where donations are made publicly but collected secretly by senior people, and by the time the [organization's] treasurer comes to collect, the funds are already taken but not submitted to the organization."

Thandi Zwane, a social welfare worker who provides food to the homeless in Matsapha Industrial Estate in Manzini, told IRIN: "If [finance minister] Majozi [Sithole] knows who is doing this, it is too bad he didn't name names never ever has a government official in Swaziland been jailed or fined for corruption, and yet they are the ones driving it."

A director of a Manzini-based social welfare NGO, who declined to be identified, noted: "I almost wish Majozi [Sithole] had kept quiet about donor funding getting stolen. We all know it happens and the organizations themselves must keep a tight lid on their fundraising."

"It's just a drop in the bucket compared to what government corruption costs," the director told IRIN. "It will make donors think twice about giving to Swaziland. Without donor funding we are done [for], and we provide services that government does not."